How Hong Kong’s Employees Contribute to Social Security
There are differences in how Hong Kong’s employees contribute to social security are analyzed. In the case of an ordinary insured employee, the employee is to contribute at least 5% of all monthly earnings.
These earnings include salary, gratuities, commissions, bonuses, allowances, and leave pay. Employees may also choose to make additional contributions if they choose to do so. For contribution calculations, the minimum permitted monthly earning amount is HK$5,000. The maximum such amount is HK$20,000. Social security contributions are tax-deductible; however, this is only true of contributions of up to HK$12,000 a year. Those who are self-employed are to make social security contributions which total 5% of either their monthly or annual income. They are also allowed to make additional contributions voluntarily. Those who contribute monthly have HK$5,000 as the minimum amount of earnings for contribution calculation purposes. The maximum monthly amount is HK$20,000.
Those who are self-employed and contribute annually have HK$60,000 as the minimum earnings amount for contribution calculation purposes. The maximum amount for such people is HK$240,000. All contributions made by the self-employed are tax-deductible up to HK$12,000 a year.
While avid foreign investors are interested in expanding into the ASEAN market, understanding the prerequisites of employment benefits will smoothen the process when incorporating into Hong Kong. These are all employers’ obligations.
Thus, it is important to engage a service provider with relevant knowledge for assistance. At Paul Hype Page, we believe in providing the correct opportunity for aspiring investors seeking to enter the Hong Kong market.
Social Security Benefits in Hong Kong
There are four types of social security benefits of which Hong Kong’s workers may make use. Some of these benefits are medical. Medical matters covered by social security in Hong Kong include physiotherapy, examination and treatment by a registered medical practitioner, dental care, chiropractic services, and purchase of required medical appliances.
The upper limit on employers’ liability for treatment costs is HK$200 per day for either. in-patient care or outpatient care. If both types of medical care are required during the same day, however, the upper limit is HK$280. The maximum limit for medical appliances is usually HK$33,000. However, this amount rises to HK$100,000 should any subsequent renewal or repair of the appliances be required.
After they have retired, Hong Kong’s employees may take advantage of old-age pensions. These pensions are a part of Hong Kong’s social security system. They may be worth either HK$625 or HK$705 per month. Lump sums may also be paid for this purpose. The amount paid is equal to the sum of total employer contributions, total employee contributions, and accrued interest.
The amount of old-age benefits as a form of comprehensive social security assistance varies from person to person. If the person lives alone, HK$2,370 to HK$4,040 is paid. If the person lives with other family members, the amount which is to be paid is between HK$2,235 and HK$3,705. The government also provides specific grants which fulfill needs of certain recipients.
There are also social security benefits linked to permanent disability. The universal disability allowance in Hong Kong may either be HK$1,170 or HK$2,340 per month. Just as is true of old-age pensions, lump sums with a value equal to the sum of total employer contributions, total employee contributions, and accrued interest may be paid.
Regarding disability benefits which are part of comprehensive social security assistance, an amount between HK$2,010 and HK$4,335 is to be paid if the person lives alone. If the person lives with other family members, the amount to be received will be between HK$1,820 and HK$4,005. There are also specific grants provided which cater to certain recipients’ needs.
Survivor benefits are paid as a lump sum. This amount is the sum of accrued interest, total employee contributions, and total employer contributions. A burial grant is part of comprehensive social security assistance. The funeral’s cost up to HK$10,750 is covered through this grant.
It would be beneficial for prospective employers to engage a professional service provider with relevant market in-sights. At Paul Hype Page, we have experience dealing with compliance matters. If you require a second opinion, we can assist you in tackling such issues.
How do Hong Kong’s workers Benefit from Social Security? FAQs